Correlation Between Sweco AB and Troax Group
Can any of the company-specific risk be diversified away by investing in both Sweco AB and Troax Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sweco AB and Troax Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sweco AB and Troax Group AB, you can compare the effects of market volatilities on Sweco AB and Troax Group and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sweco AB with a short position of Troax Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sweco AB and Troax Group.
Diversification Opportunities for Sweco AB and Troax Group
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sweco and Troax is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sweco AB and Troax Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Troax Group AB and Sweco AB is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sweco AB are associated (or correlated) with Troax Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Troax Group AB has no effect on the direction of Sweco AB i.e., Sweco AB and Troax Group go up and down completely randomly.
Pair Corralation between Sweco AB and Troax Group
Assuming the 90 days trading horizon Sweco AB is expected to under-perform the Troax Group. In addition to that, Sweco AB is 1.34 times more volatile than Troax Group AB. It trades about -0.13 of its total potential returns per unit of risk. Troax Group AB is currently generating about -0.08 per unit of volatility. If you would invest 21,500 in Troax Group AB on August 29, 2024 and sell it today you would lose (750.00) from holding Troax Group AB or give up 3.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sweco AB vs. Troax Group AB
Performance |
| Timeline |
| Sweco AB |
| Troax Group AB |
Sweco AB and Troax Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sweco AB and Troax Group
The main advantage of trading using opposite Sweco AB and Troax Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sweco AB position performs unexpectedly, Troax Group can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Troax Group will offset losses from the drop in Troax Group's long position.| Sweco AB vs. Indutrade AB | Sweco AB vs. Beijer Ref AB | Sweco AB vs. Addtech AB | Sweco AB vs. NIBE Industrier AB |
| Troax Group vs. Addtech AB | Troax Group vs. Teqnion AB | Troax Group vs. Vitec Software Group | Troax Group vs. Lagercrantz Group AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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